When I tell my close friends—who know of, and share, my anti-capitalist anarchist views—that I own some cryptocurrency (my current holdings equal something under 10 USD) I get the same sort of looks that I did when I told them in 2009 that I used Twitter. "How can you support that libertarian bullshit?"

BTC is not entirely straightforward, and falls into a new category of the economic uncanny. But basically, it is a peer-to-peer database that lists a number of units of value, or coins, by unique addresses, and assigns them to personal owners by more unique addresses. The database makes sure that only the right coins are assigned to the right owners by keeping a single list of who owns what, called the blockchain. It also makes sure that the blockchain cannot be falsified, by placing the transactions between pieces of a complicated code, which are called the proof of work. Since every computer on the network is simultaneously generating the proof of work (and is rewarded for doing so by being given a fraction of new BTC according to the amount of work they are doing, in what is called mining), it would take a computer that is more powerful than all the others combined to mess up the record. So, through this peer-to-peer verification system, the record stays legit, without needing the need for a centralized bank to be in charge.

It may sound arcane, but if Bitcoin was a commercial beta release, it would be a runaway success. Even with recent fluctuations, the total value of the cryptocurrency is still over eight billion USD, it has spawned many third-party startup firms attempting to offer products to use with Bitcoin, and there have been more copycat cryptocurrencies, "altcoins," than anyone can count. And at least we know why Bitcoin is valuable, unlike most social media startups: People pay money for it. It's as simple and old fashioned as that.

But bitcoin is supposed to be about something more than just money. There is an ideology that is part of the Bitcoin service; one can not help but download it along with the electronic wallet. However, this ideology is not exactly what it is often made out to be. Bitcoin is supposed to be the killer app of a libertarian dream—it is purportedly 1) a digital currency, 2) a means for conducting anonymous transactions, and 3) an egalitarian, peer-to-peer economic system that will render obsolete the need for fiat currencies, cash, wire transfers, bank accounts, and any other current financial framework that happens to be unpopular. And it fails to live up to all these promises.

Bitcoin isn't quite a currency; it's a wholly new sort of financial instrument, functioning differently than anything with which we are familiar. A currency is a tool for the circulation of value, which through the force of the market becomes the only way that the vast majority of people can offer their labor in exchange for the necessities of life. If businesses start paying their employees in BTC then it might be a currency; until that time it is more like day trading, or stamp collecting. At the same time, it is entirely intertwined with conventional currencies, banks, and legal structures. Cryptocurrencies rely on the ubiquity of expensive graphics processing cards produced by capitalist companies under state-negotiated international trade laws. Thus, they simply cannot be the lynchpin of anti-government sentiment they are made out to be.

Even in the blackest markets of the internet, there are many early-adopters, but no fully-adopteds, no one who can claim to have entirely disengaged from fiat currencies and infrastructures, or from mainstream capitalism. Bitcoin might have benefits, but currency still has other benefits. People like their financial transactions to have authorities to whom they can appeal in times of crisis. They may buy pizzas with Bitcoin or stake disposable amounts on arcane, high-risk investments, but their 401k is in dollars.

Traders at the Chicago Mercantile Exchange during the 2008 financial crisis, from Marc Boulos, All That Is Solid Melts into Air (2008). Still frame from two-channel video.

Cryptocurrencies are a weird and unfamiliar sort of financial machination. This weirdness can be a benefit. When investing in any particular altcoin, there are new variables to consider. How many people are currently mining it? What is the structure of the mining payouts? What are the reputations of the pools currently mining it? All of these questions affect the altcoin's stability, and its potential for success. This isn't like comparing one company to another or one currency to another. Each new altcoin is new financial vehicle with a mechanics that may be completely different than all that came before. Real currency is based on the presumption of stability, but cryptocurrencies are experiments. No one knows which is best, until it succeeds. This is an experiment in which the data has only just begun to come in.

I've been exploring cryptocurrency for a few years now, attempting to get a handle on what this experiment is all about. I've watched from the sidelines, trying to see what this small pocket of the internet is like, in the same way mainstream America watches The Wire so that they think they understand the "drug game." I've mined a bit of Dogecoin (DOGE). Some Lottocoin (LOT). I mined Kanyecoin, before it became Koicoin (KOI). I mined a coin called "42," the gimmick of which is that there are only forty-two of them. At one time or another I've owned Bitcoin, Litecoin, Freicoin, Globalcoin, BBQcoin, Catcoin, Megacoin, Neocoin, and a number of others that I don't remember because I bought and sold them on exchanges within a day just to play the market and never even installed a wallet. I'm making less money than I would with a well-constructed fantasy football team or March Madness bracket, and I've won more at a casino by putting a quarter into a poker machine. But I'm learning a thing or two about how all this works.

I get a good amount of the altcoin gossip, and hear what is going on elsewhere. It is the usual darknet stuff of your new-normal cyberpunk future—hacks, DdoS, pre-mining scams and ego battles between various IRC bots and sock puppets. Things reached a head recently with a so-called "Chinese Dogecoin pump-and-dump" scandal, which I have yet to really unravel to decide whether it was a real scheme, just xenophobic trolling, or some combination of the two. There is often talk of a conspiracy between the high-traffic mining pool owners, and the developers of some of the common software and coins being released.

Is there some collusion behind the scenes to manipulate various altcurrency prices, and to hack and scam people? Undoubtedly. There is money to be made, there are lots of newbies who think a cryptocurrency is some sort of online lottery, and there is no regulation. So if you want to ask if there is horse meat in these altcoins, the answer is, somewhere, yes. If I had any advice on what one's altcoin politics ought to be, I would say, the politics of mistrust. Encrypt your wallet, watch your back, and invest in strong servers.

Does any of this mean that any participation in cryptocurrencies is inherently unethical? I don't think that is clear. No workers are having their labor stolen from them. No one is being physically harmed with ill-gotten altcoin gain (that we know of). There is no categorical exploitation within cryptocurrencies, certainly not compared to fiat currencies. Eight billion USD is a lot of value, but only relatively. That's greater than the GDP of Benin, but less than 1/100 the GDP of Indonesia. It is only a few years' work to a Silicon Valley angel investor or a drug cartel, and a minute fraction of the student loan industry. But aren't cryptocurrencies bad for the environment by using tons electricity? Sure, they use electricity. But it is not nearly as bad as everyone thinks it is. (I estimate that Bitcoin uses 2x more electricity than every iPad in the world, but ¼ the electricity of all the flat screen TVs sold in the first quarter of 2012.) And compared to the ecological disaster than is American's consumption of chicken wings, I feel that vegetarianism is probably a stronger political decision than directing an inordinate amount of attention to the environmental costs of running your GPU overnight.

On the other hand, while many commentators argue that cryptocurrency has the potential to enable new forms of collective behavior, none of the efforts to realize this potential have really panned out yet. Namecoin is an altcoin designed to serve as a DNS registry, which is perhaps one of the few "coins for good" that actually makes sense, even though it may just be useful in theory. Riecoin, a coin based around attempting to prove or disprove the Riemann hypothesis with its proof of work, has just launched—but is not old enough to give an indication as to whether either goal might be attained. There is a document registry service utilizing the Bitcoin blockchain to certify that particular documents existed at a certain point in time. But by only certifying the title of documents and not the content itself, the service has far less utility than a notary public, and it is hard to see exactly what point this serves. Zedcoin was developed as an in-game cryptocurrencies for zombie genre games, as potentially being a more decentralized alternative to Second Life's Linden Dollars, but other than having its own branding, it's hard to see the purpose of using one's GPU for mining the coin rather than playing the game. Chase Bank has reportedly patented their own cryptocurrency design, which will purportedly result in lower transaction fees than credit cards offer, but meanwhile, no one is going to download the source on Github to start mining it. A service has been announced that adapts Bitcoin and Torrent technology into a secure communication tool, but it is too new, and the jury is still out as to whether or not it will work.

My reasons for being involved in cryptocurrencies are not based on sweeping visions nor utilitarian schemes. Even the most radical anarchist, in struggling against the appropriation of surplus value through the alienation of labor, is sometimes forced to move some commodities around in order to live in this world. "Master's house" and "master's tools" notwithstanding, the rent is due. The only alternative is heading off into the hills, or living the life of a begging monk. You need to take part in the larger economy of the world in order to survive, and so you are forced to participate in that system. You buy your groceries in the United States in USD because you are paid in USD. Your political views are not decided when you are forced into a market.

The same thing goes for voluntary markets; joining a market is not a politics. Just as buying groceries with dead presidents doesn't invalidate your radical ideas, downloading a cryptocurrency wallet does not transform you into a seasteading libertarian. The decision to participate in Bitcoin, in other words, means less than your conduct within the bitcoin market. To be truly anti-capitalist, one must understand the range of markets that exist, so that one can choose the right behavior in any of them. The right behavior can only be a choice within the conditions of the market.

Lawrence Weiner, Hour Note Prototype (2009).

Cryptocurrencies are not a market that anyone is currently forced into. (The rent is still due in dollars, not Dogecoin.) It is a sideline deal, like a timebank, or a regular poker game. People make weird deals all the time, but a weird deal does not a currency make. In this era of late capitalism, tangential, voluntary-markets are proliferating—thanks in no small part to the technology which makes many of them possible.

But this phenomenon is not strictly an effect of digital technology. Bartering, for example, is a voluntary market that has co-existed with capitalism for hundreds of years. Or consider this: People use Tide laundry detergent as drug currency. It is relatively expensive, not too hard to shoplift. Combine the high value of the brand name with relatively low margins made by the retailers, and you get a burgeoning grey market in which small shopkeepers don't think too hard about buying a discount load of washing detergent bottles out of the back of someone's trunk for cash. Who is conducting unethical behavior in the context of this market? The drug users looking to get a quick five bucks? The retailers who are just trying to make a profit running a store? The customers who are so loyal to the brand that they'll pay inflated prices? Or Procter & Gamble, who in 1946 invented alkylbenzene sulfonates so good at washing clothes in a gentle machine, completely changing the way that we do laundry? This is how markets develop—through the accretion of many individual decisions, some borne of greed, others of necessity, others of sheer invention. If there is some transformative social potential in cryptocurrency, it will emerge from a collusion of behaviors occurring under unique conditions, in the context of experimentation and risk.

For now, this is a speculative technology, and there is plenty of speculation. This is a most basic period of evolution, a time of big ideas and unbridled greed. Most of the aforementioned altcoins aren't even really planned, they are just cloned and released into the wild to see how they do with a little bit of extra marketing and a few tweaks to the block pattern. This is an Accelerando dimension, where you can make a new listing on a financial exchange by tweaking a few lines of code and uploading it to Github. Kanyecoin flopped, not just because of the legal pressure from the music star whose likeness it stole, but because someone got greedy and DDoS'ed all the smaller pools on the opening day, driving miners away to other coins. Dogecoin has survived, despite being birthed from a meme—because its large coin capacity and random block rewards that make it more fun to mine. The true Hobbesian SF fantasy is happening in the competition between altcoins, because nobody really knows what makes a good altcoin, until they see who emerges from the cryptocurrency mining Thunderdome.

The technology will continue to evolve, as people continue to figure out exactly what it is for, what people will adopt, and what will make them money. To what extent will it produce collective, communal behavior, and to what extent will it merely reproduce the harsh logic of markets? Will cryptocurrencies end up being peer-to-peer in any more significant way than a drug market or a stock market? These questions are still unanswered in a satisfactory way.

The beta release rolls onward, as the human species continues to see what it can do with all of this wonderful technology it has created, mostly as it tries to make a buck off of its fellows. This is evolution, I guess. Not of human beings, who actually trend towards altruism and organization. But of technology, which is always adopted first and foremost by those who are attempting to leverage gain out of it. Can we make it a business? Can we make it a weapon? Can we convince others it is a business or a weapon, by investing our accumulated capital in it, to accumulate more capital? This is capitalism's eternal demand, the logic of capitalism. Technology, on the other hand, whether attempting to replace the current means of currency, transportation, or communication, is a tool, neither good nor bad, and certainly not neutral. We use it, but it also changes us as individuals and as a collectivity, and we probably will take a long time to understand how.

I think it's worth considering the history of other substitutes for government provided currency when discussing the use of Bitcoin, etc, as an option. Specifically I'm thinking of the use of company script. In the U.S. this was more prevalent in the 19th century and brought with it (along with the fluctuating gold/silver standard) greater market volatility. The use of company script also provided an easy way to exploit workers by price gouging at the company store. This practice hasn't disappeared, i.e.http://jurist.law.pitt.edu/paperchase/2008/09/mexico-supreme-court-orders-wal-mart-to.php and I suspect that with these new forms of currency it will be much of the same.